Euro Pound Sterling 2016 Exchange Rate Ends Week near Monthly Low

The Euro Pound 2016 exchange rate continued to perform poorly throughout Friday’s trade, hitting a lot of 0.85 on Friday afternoon – its lowest level since mid-September.

However, Sterling bullishness cooled slightly towards the end of the day as some traders began to perceive the optimism on Trump’s USA to be overblown amid a lack of clarity from him or his team.

While concerns of rising populism in developed nations weighed on the Euro throughout the day, Sterling could also see some of its recent gains reserved in the next week if traders begin to see discrepancies between post-Brexit Britain and Trump’s proposed protectionism.

(Previously updated 12:50 GMT 11/11/2016)

Friday’s session saw a similar pattern as Thursday for the Euro Pound Sterling 2016 exchange rate, with the Pound pressing ahead once more and pushing EUR GBP down to its worst levels since before the Sterling ‘flash crash’ over a month ago.

Hopes of a UK-US trade deal continued to cheer UK markets despite the difference in stances on globalisation between the UK government and that seen on President-elect Trump’s campaign.

The morning’s final October German Consumer Price Index (CPI) figures did little to change damp Euro sentiment, as they matched preliminary figures in every print.

The Euro Pound Sterling 2016 exchange rate plunged as low as 0.86 on Thursday afternoon, hitting its worst levels in about a month as UK traders continued to grow in optimism about the future of Britain’s relationship with the US.

While the Brexit vote hurt the UK’s trade-ties with the European Union, Trump and his aides have indicated over the last few days that Britain is a high priority for the next President’s administration.

The possibility of closer trade-ties between the UK and USA, as well as speculation that populism and protectionism could rise in other developed nations, left the Pound far stronger on Thursday.

Sterling is likely to continue holding its ground on Friday, meaning EUR GBP is on track to end the week well below opening levels.

(Previously updated 12:52 GMT 10/11/2016)

Despite trending more strongly for most of Wednesday’s trade session, the Euro Pound Sterling 2016 exchange rate unexpectedly fell to new weekly lows on Wednesday evening and Sterling held this ground well into Thursday.

While the Pound fluctuated limply for most of Wednesday, the currency solidified its position more towards the end of the day as investors reacted to hints from Trump’s advisers that post-Brexit Britain would be first in line for a US trade deal under the Trump administration.

As markets continued to cool Wednesday’s shock election result, the US Dollar also regained much of its lost ground, weakening the Euro. Concerns of a possible extension to the European Central Bank’s (ECB) easing policies also weighed on demand for the shared currency, allowing Sterling to hold its highs.

(Published 07:00 GMT 10/11/2016)

The Euro Pound Sterling exchange rate experienced a direct impact from Wednesday’s shocking announcement that Republican Donald Trump had won the 2016 Presidential election, but this effect faded as markets awaited further developments.

EUR GBP briefly surged to a high of 0.90 as state-by-state results were far more in Trump’s favour than expected. However, by Wednesday afternoon the pair had returned to trend much closer to the day’s opening levels as markets hoped for a better-behaved Trump.

Euro (EUR) Strengthens from Wednesday’s US Dollar (USD) Selloffs

Wednesday morning saw headlines struck with the news that almost no one expected: Republican candidate Donald Trump had won the 2016 US election and the Presidency.

This news sent markets into shock throughout Wednesday’s trade session as traders reacted to the possibility that Trump’s protectionist economic and foreign policies would come into effect and harm trade.

The Euro was able to benefit from this news, due to being the currency most commonly traded with the US Dollar. With the US economy’s future uncertain, the EUR USD exchange rate soared.

The Euro’s US Dollar-correlated gains were so influential that it boosted the shared currency against the limp Pound too, briefly thrusting the pair to its best levels in a week.

However, the Euro’s advances softened later in Wednesday trade as markets cooled. Trump’s acceptance speech was perceived as uncharacteristically ‘Presidential’, which increased hopes that his proposed protectionist policies were just chatter.

Comments on the election result from the European Central Bank (ECB) may also have calmed markets, with chief economist Peter Praet stating;

‘Usually what we do is look through volatility of course for the first days so we have to be a bit patient and see how things evolve

All communications on monetary policy will not change now as a result. We have to be calm, calmer than the markets.’

The Pound was anything but steady on Wednesday, fluctuating in response to currency rivals like the Euro.

Sterling did rebound later in the day. After spending Wednesday morning being pushed lower by demand for ‘safe havens’ and the Euro as the US Dollar dropped, some traders bought the weakened Pound up from its worst levels keeping it near levels of key psychological resistance.

This was despite news that the European Union expected Britain’s economic growth to slow in 2017 as a result of the inevitable Brexit process, news that would typically weigh on GBP demand.

Similarly to the Brexit vote back in June, the short to mid-term future of the Presidential election outcome is shrouded in uncertainty. This means volatility is forecast for the foreign exchange market including the Euro Pound Sterling 2016 exchange rate.

The main driving force for the US Dollar (and by extension the Euro) in the coming week will be comments from the US government and incoming President Donald Trump about the Republican’s potential policies and how they may be handled or put into practise.

If Trump continues to edge away from the protectionist rhetoric that characterised his campaigning over the last year, markets may return to normalcy faster than expected which would strengthen the US Dollar and allow the Pound to recover further against the Euro.

However, if that fiery anti-trade rhetoric traders are anxious about returns, the US Dollar will surely resume its downtrend allowing EUR GBP to make a sturdy advance.

It is likely the Pound will also generally benefit from the US Dollar’s falls, but the Euro is the more likely of the two to enjoy a mid-term uptrend from it.

The Euro Pound will begin to cool from election jitters in the coming days regardless and become less sensitive to the movements of the US Dollar.

Markets may even react to Friday’s final October German Consumer Price Index (CPI) results if they fail to meet preliminary figures as expected, which could leave the Euro Pound Sterling 2016 exchange rate a little weaker by the end of the week.